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Article
Publication date: 14 June 2022

Johnson Kampamba, Simon Kachepa and Kgalaletso Lesobea

The purpose of this study was to assess real estate cycles and their impact on property values in Gaborone, Botswana. Investors and real estate professionals in Botswana rarely…

Abstract

Purpose

The purpose of this study was to assess real estate cycles and their impact on property values in Gaborone, Botswana. Investors and real estate professionals in Botswana rarely assess property cycles when purchasing property. This study therefore, aims to assess whether real estate cycles do exist, their duration and the type of real estate cycle that Botswana experiences.

Design/methodology/approach

Data was collected from primary and secondary sources. This included sourcing out information at the Deeds Registry Office in Gaborone on residential property sales and a questionnaire to 100 property investors. A record was made of properties that were sold for the period of 16 years starting from the year 2000 to 2016. Secondary data on the other hand was also collected from published and unpublished books, academic journals, professional journals, magazines, reports and monographs. A quantitative approach was used in this study. Data was analysed using Microsoft Excel and subsequently presented in form of tables and graphs.

Findings

The findings from the literature review revealed that there are four phases in the real estate cycles (recovery, expansion, oversupply and recession) and each has distinct features that an investor must be aware of to avoid consequences in the property market. The results from the data analysis revealed that real estate cycles do exist in Botswana as identified during the past 16 years. The cycle that Botswana experiences is called the kitchen cycle. It was also evident that Botswana experienced three cycles lasting five to six years each. Furthermore, it was discovered that all phases in the real estate cycles affect property values.

Research limitations/implications

There is relatively little information about property cycles and their timing in Botswana. Therefore, this study may assist valuation surveyors to make promptly informed decisions on property investment through cycle assessment and hence positively inform the public and financial stakeholders. Society might find this beneficial in as far as decision-making is concerned when thinking of investing in real estate. The current system at the deeds office is cumbersome and time consuming, thus making it difficult for the researchers and possibly the public to analyse the property market. This study therefore, may encourage the Deeds Registry Office to computerize their records.

Practical implications

There is relatively little information about property cycles and their timing in Botswana. Therefore, this study may assist valuation surveyors to make promptly informed decisions on property investment through cycle assessment and hence positively inform the public and financial stakeholders.

Social implications

Society might find this beneficial in as far as decision-making is concerned when thinking of investing in real estate.

Originality/value

To the best of the authors’ knowledge, this paper is the first of its kind in Botswana to extend the knowledge of real estate cycles and their impact on property cycles in Botswana.

Details

International Journal of Housing Markets and Analysis, vol. 16 no. 5
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 12 June 2019

Moshe Szweizer

The purpose of this paper is to expand our understanding of processes governing commercial property cycles, and to provide tools, which enable identification of property cycles’…

Abstract

Purpose

The purpose of this paper is to expand our understanding of processes governing commercial property cycles, and to provide tools, which enable identification of property cycles’ turning points’ location.

Design/methodology/approach

This paper is divided into three parts. The first looks at the demand-supply dynamics and the location of two characteristic cyclic points, the market bottom and the cycle commencement. In the second part a property relevant formula for entropy is derived, and its relation to the cycle overheated stage and the market peak is studied. In the third part, we discuss still another characteristic point of the cycle, which relates to the stage when developers elect to undertake new projects. This analysis is done by employing the chaos theory, and its relation to the cyclic evolution.

Findings

It is found that some markets cycle, while others fluctuate only. A clear method for distinguishing among these is provided. The bottom of a cycle may overlap or be time separated from the start of a subsequent cycle. Market peaks are characterised by a sharp decrease in financial component to entropy for top quality building grades. A cycling market is characterised by crossing of a distinct vacancy rate during the cycle progression.

Practical implications

The tools developed in the paper allow for clear characterisation of the market types and their cyclic behaviour. This in turn allows for timely characterisation of the market state and for short time-frame forecasting. The depth of a cycle may be calculated and the subsequent correction level estimated.

Originality/value

The paper utilises cross-field approach by taking methods from both physics and mathematics and applying them to property markets. It breaks new ground both in property research and in applied mathematics by showing how the current frontier in pure mathematics may be applied to property.

Details

Journal of Property Investment & Finance, vol. 37 no. 5
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 3 April 2018

Moshe Szweizer

The purpose of this paper is to extend the studies of commercial property cycles by providing a cross-field approach to property markets modelling.

Abstract

Purpose

The purpose of this paper is to extend the studies of commercial property cycles by providing a cross-field approach to property markets modelling.

Design/methodology/approach

The approach allows for the incorporation of market shocks into the property cycle model as fundamental building blocks; assessment of overall market absorption generated through cyclic activity; and timing estimation of major market events. An ideal model is first constructed, which relies on an observation that a property cycle consists of four distinctive phases. These are described formally through appropriate formulae. Subsequently, it is observed that an analogous cyclic behaviour is described in physics as the Otto cycle. The formulae derived in physics for the Otto cycle are now redefined so to be applicable to the property market.

Findings

The model has been applied to the London office market, both to the historic and the current data sets. This allowed for the comparison of model predicted absorption and vacancies with the historic records, providing for assessment of the model accuracy. The model predicted that absorption was also compared with historic space supply allowing for estimation of oversupply and resultant vacancies. London office submarkets were analysed and compared to each other, allowing for estimation of their relative attractiveness as perceived by tenants and developers.

Practical implications

The model may be used to estimate cycle generated absorption; therefore, over and under supply of space due to developers’ activity may be assessed. It is also possible to use the model to assess the timing of future market peaks and troughs.

Originality/value

This is the first research directly applying the methodology developed in physics to commercial property cycles.

Details

Journal of Property Investment & Finance, vol. 36 no. 3
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 1 September 1996

Corinne Yap

Singapore’s retail landscape has undergone much change since the 1960s as a result of its economic growth and social change. Fuelling the transformation is the Urban Renewal…

4167

Abstract

Singapore’s retail landscape has undergone much change since the 1960s as a result of its economic growth and social change. Fuelling the transformation is the Urban Renewal Authority (URA) whose policies have resulted in modern one‐stop shopping centres. Today’s retail market is highly cosmopolitan, complex and sophisticated with nearly every international brand and retailer found there. However, the retail market has been tough in the last few years owing to problems such as an oversupply of retail space, high labour costs and a tight labour market. Describes strategies adopted by retailers and developers to combat the problems in the industry. Among the strategies adopted by retailers are niche marketing and regionalization. They have also forged strategic alliances with other larger retailers. Developers, on the other hand, have recognized the need to find the right tenant mix as opposed to just securing the highest rents. Less competitive shopping centres have also considered converting their retail space to more sought‐after office space. The government continues to steer Singapore’s urban development with its policies. The URA’s long‐range vision is presented in its concept plan. The broad policies of the concept plan have been translated into detailed development guide plans for specific areas.

Details

International Journal of Retail & Distribution Management, vol. 24 no. 8
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 18 March 2020

Laura McCann, Norman Hutchison and Alastair Adair

Recent years have witnessed significant increases in the number of undergraduate students entering UK higher education. This increase is a result of the removal of the sector-wide…

1129

Abstract

Purpose

Recent years have witnessed significant increases in the number of undergraduate students entering UK higher education. This increase is a result of the removal of the sector-wide cap on student numbers in England and Wales, along with a growth in overseas students attracted by the reputation of UK universities and the weakening of the value of Sterling. Adopting a corporate real estate perspective, the aim of this paper is to understand how the UK student residence market is structured and financed, and to identify the motivations that are driving the strategies adopted by the universities, private sector providers and investors in this market. In doing so, this research seeks to test the appropriateness of the Gibler and Lindholm (2012) model of corporate real estate strategy in the UK higher education sector.

Design/methodology/approach

Data was gathered from a survey of UK university secretaries, combined with interviews of private sector providers, bank lenders and the analysis of secondary data on investment flows into purpose built residential accommodation (PBSA).

Findings

UK university real estate strategy is mainly one of outsourcing student accommodation to reduce costs as well as employing modern purpose-built student housing as a marketing tool and brand enhancer. This strategy is also used as a risk mitigatory tool enabling universities to adjust to changing student demands. Revisions to the Gibler and Lindholm (2012) model are proposed to reflect the reality of the real estate strategy adopted by the universities. Private sector providers view the sector favourably and are set to be the main providers of new supply over the next decade, entering into strong partnerships with the universities. While there is evidence of some oversupply of bed spaces in certain cities, well-located developments are viewed as an attractive lending opportunity. Since 2013 there has been significant growth in institutional investment into UK student accommodation, albeit sentiment is currently tempered by political uncertainty.

Practical implications

The role of PBSA designed to meet modern student requirements is playing a critical role not only in attracting, recruiting and retaining students but also enhancing the overall higher education experience promoting student welfare and well-being.

Originality/value

The corporate real estate strategy adopted by the UK higher education sector is an under researched area. This paper focuses on the strategy surrounding student accommodation provision and reports on the findings of an extensive survey of the key players in this sector. The results are of value to all stakeholders including government and regulators, at a time when higher education is facing substantial challenges. The evidence of a growing partnership between universities and the private sector is viewed as a logical solution, both for the present and the foreseeable future.

Details

Journal of Property Investment & Finance, vol. 38 no. 2
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 11 October 2018

Małgorzata Rymarzak

The purpose of this paper is to analyse the appropriateness of incentives used by governments for Polish public higher education institutions (HEIs) to be more efficient in real…

Abstract

Purpose

The purpose of this paper is to analyse the appropriateness of incentives used by governments for Polish public higher education institutions (HEIs) to be more efficient in real estate and how these incentives can be strengthened.

Design/methodology/approach

A closed-ended questionnaire was sent to all public HEIs in Poland. Of the 132 questionnaires sent, 57 were successfully completed and returned, representing a response rate of 43 per cent.

Findings

Analysis of empirical data demonstrates that when considerable public funds, both national and European, were distributed to extend and upgrade academic infrastructure, Polish HEIs have had no obligation to show how they manage the assets entrusted to them, and the government has not created adequate incentives to encourage efficiency in the use of HEIs real estate. This may have resulted in a significant, yet not always justified, increase in the space at their disposal. In view of a demographic decline, the low level of internalisation of Polish HEIs, the decreasing level of funding from the public purse and the growing operation and maintenance costs of the buildings, an oversupply of space may cause financial distress to some establishments. This may affect the future of the whole system of higher education.

Practical implications

This paper can be a resource for HEI chancellors, financial directors and campus managers, as well as HEI funding and supervisory institutions.

Originality/value

This paper highlights the need to strengthen incentives for public HEIs in Poland to foster their greater efficiency in resource allocation and utilization. Greater transparency in HEI operations and the improvement of the POL-on system may contribute to more efficient use of university assets.

Details

Journal of Corporate Real Estate, vol. 20 no. 3
Type: Research Article
ISSN: 1463-001X

Keywords

Article
Publication date: 7 October 2014

Albert Wee Kwan Tan, Zhao Yifei, Dali Zhang and Olli-Pekka Hilmola

The purpose of this paper is to identify global trends in the third-party logistics (3PL) industry, and with that to find out where the opportunities and challenges lie, what the…

3086

Abstract

Purpose

The purpose of this paper is to identify global trends in the third-party logistics (3PL) industry, and with that to find out where the opportunities and challenges lie, what the critical success factors are, and how companies can position themselves well in China. As there is currently very limited knowledge about the 3PL industry in China, this study also intends to shed light in this area.

Design/methodology/approach

The study is conducted through focus group interviews with senior executives of leading 3PL companies in China followed by a survey with 70 logistics companies.

Findings

The key strengths of the logistics industry in China include numerous factors such as good connectivity and new infrastructure, while its main weaknesses are a shortage of qualified staff and slow adoption of technologies. There are a number of concerns and issues raised, such as lack of qualified staff, oversupply of warehousing space in China, competition from the influx of foreign 3PL companies to China, and regulations on free trade zones, seaports and airports, all of which may have policy implications.

Research limitations/implications

As most of the logistics companies in the study are located and dominating in the Eastern and Southern China, it may be useful to conduct similar study in the new emerging western and central regions of China for comparison.

Practical implications

Managers and investors will appreciate the challenges and opportunities in logistics services in China and have a better insight into Chinese logistics development.

Originality/value

While China has been viewed as a cost effective place for manufacturing, the logistical costs in China are still very high as compared to other developed countries. This research will highlight the key reasons for the high logistical cost in China.

Details

Industrial Management & Data Systems, vol. 114 no. 9
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 1 March 1999

Loo Lee Sim

Focuses on the small‐scale retail sector in Singapore. After reviewing the literature on small‐scale retailing, it discusses the measures undertaken by governments in European…

2946

Abstract

Focuses on the small‐scale retail sector in Singapore. After reviewing the literature on small‐scale retailing, it discusses the measures undertaken by governments in European countries and Japan to help the small retailer. The various schemes and action plans undertaken by the Singapore Government to restructure the retail sector under the Retail Sector Development Plan are discussed and evaluated. The Retail Sector Development Plan is found to have limited access. It is recommended that the Government should introduce schemes to encourage marginally performing businesses to exit from the retail sector so that it can be more efficient and competitive.

Details

International Journal of Retail & Distribution Management, vol. 27 no. 2
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 12 July 2011

Thomas Hamilton

The major purpose of this paper is to refocus the appraisal profession on estimating value rather than explaining price. The appraisal profession itself encompasses many…

1412

Abstract

Purpose

The major purpose of this paper is to refocus the appraisal profession on estimating value rather than explaining price. The appraisal profession itself encompasses many disciplines of valuation beyond real estate, and transcends disciplines such as economics, the construction trades, business, finance, law, government, statistics, mathematics, geography, geology, mapping, and information sciences.

Design/methodology/approach

This paper describes how rapidly changing capital market conditions greatly affected transaction prices for real estate when underlying economic fundamental values of these properties remained unchanged. As such, differences between transaction prices and underlying economic value can be determined when capital markets rapidly expand or contract.

Findings

Most of the concepts, methods, processes, and techniques that appraisers use today are the direct result of studies performed within the academic community and most often from some other related field of study, rather than from pure valuation research itself. This is where the problems with which one is living today have erupted.

Originality/value

Property values and transaction prices are two very different beasts: value is a concept, whereas price is a reality. Appraisers have somehow forgotten that the price paid for real estate can be quite different from the value of that same parcel of real estate.

Details

Journal of Property Investment & Finance, vol. 29 no. 4/5
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 1 June 1995

Alastair Adair, Jim Berry and Stanley McGreal

Suggests that capital investments normally flow to economic sectorsand regions which produce the highest returns within certain riskparameters. Therefore geographical areas…

1407

Abstract

Suggests that capital investments normally flow to economic sectors and regions which produce the highest returns within certain risk parameters. Therefore geographical areas perceived to be peripheral to the core economy of a certain country, region or city suffer when attracting institutional investment. Investigates investment flows into real estate in two peripheral economies: Northern Ireland and the Republic of Ireland. Analyses data from the Investment Property Databank (IDP) and market participants in terms of regional and sectoral performance, and assesses institutional investors′ perceptions of investment activity in Ireland as a peripheral European region. Also compares investment performance of institutional property holdings in Ireland to returns in the UK.

Details

Journal of Property Finance, vol. 6 no. 2
Type: Research Article
ISSN: 0958-868X

Keywords

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